Author Archive for Dr. Doug Perednia

As you may have noticed, Road to Hellth posts have been few and far between since the re-election of President Obama in 2012. One important reason is that we started this blog in an attempt to highlight various landmarks that American Medicine is passing on its way to mediocrity, or much, much worse. Perhaps naively, we had hoped that our fellow citizens might want to think twice about taking this road if they could clearly see where it going to lead. After all, who could imagine that the average person would want to pay more for worse care, while having faceless unelected bureaucrats who get better benefits and healthcare than you do arbitrarily making gazillions of rules about what care and services you must or could not have and when?

Whether it’s handing federally funded guns to drug runners in a “fast and furious” way, or billions of taxpayer dollars to politically connected but subsidy dependent “green” companies such as Solyndra, or attributing the September 11th killings in Benghazi to spontaneous demonstrations against an Internet video, or selectively and arbitrarily deciding which words and phrases of which parts of which laws it wanted to enforce or ignore – the underlying message of the President’s re-election was that process no longer matters; and for that matter neither did the results. The electoral majority of Americans are either too ignorant, or too helpless, or too discouraged, or too self-absorbed to resent a previously unimaginable level of waste, fraud and abuse carried out in the name of “progress”, “fairness”, “equity” or some other term rendered meaningless as the new feel-good buzzword of the day. (Most chillingly, these quintessentially unquantifiable terms are now most frequently used to assign a sense of guilt and blame to whoever might happen to disagree with policies carried out in their name. But that’s another story.)

The clearly incompetent implementation of ObamaCare itself is perhaps the best single example of the listlessness that has overtaken a nation that used to pride itself for its efficiency, effectiveness and lack of corruption. Corruption? Yes, corruption. For the way in which our elected and appointed officials are conducting the public’s business has become well and truly unhealthy; broken and despoiled by those entrusted with it.

Let’s just take a single example: Oregon’s ObamaCare insurance exchange – the one called “Cover Oregon”.

The experience of Cover Oregon is a microcosm of the ObamaCare exchange efforts in general. Months before its putative roll-out date of October 1st, Cover Oregon began a $21 million psychedelic ad campaign designed to do something, but nobody seemed to know exactly what. (A liberal Oregon street tabloid (Ed. note: Is there any other kind?), The Portland Mercury, described them as “twee”.) Here’s just one example:

To live in Oregon over the past six months is to have been bombarded with these types of commercials for Cover Oregon at every turn – on television, the radio, billboards and in print ads. Mind you, this is for a state that has only 3.5 million people, of whom 560,000 were uninsured in 2011 and another 600,000 were already enrolled in Medicaid.

And how has the Cover Oregon rollout gone? Well as of the last day of 2013, Cover Oregon’s defective website has not been able to enroll a single person. Not one. As of December 2013, this amazing performance has cost over $160 million and counting. Luckily, there are far more of your tax dollars to spend: the federal government awarded Oregon $226 million to set the whole exchange up.

An August 2012 report from the project’s quality assurance contractor found the exchange project was disorganized, lacked basic management and budget controls to ensure contractor performance. The exchange’s fate was further endangered by distrust and lack of communication between Lawson’s Oregon Health Authority and Cover Oregon, the public corporation that took over responsibility for the exchange’s contracts in May 2013.

As recently as last week, Lawson defended the choice of Oracle and the decision not to hire a systems integrator. The exchange was built with Oracle software and hardware, so who better than Oracle to manage the process, she said.

“The reason why you want a prime is you want to have access to the people who know the most about the platform or platforms you’re using,” Lawson said. “We had Oracle.”

Lawson worked closely with Oracle when she worked for two California state agencies before her hiring by Oregon. She was a featured speaker at OpenWorld, Oracle’s enormous annual technology trade show, in 2012 and 2013, she confirmed. She received no compensation for doing so, she said.

Tina Edlund, acting OHA director, sent out an email shortly after 2 p.m. Thursday announcing Lawson’s departure. In an email to her bosses, Lawson said the recent death of her mother-in-law convinced her to make the move. She’d been commuting to Oregon weekly from her home in the Sacramento area.

“We want to thank Carolyn for her service to our agencies and the state,” Edlund said in the email. “Under her leadership, the OIS team had many successes and improved services to both OHA/DHS employees and the citizens of Oregon.”

Lawson handed control of the exchange in May to Rocky King, Cover Oregon’s executive director. Longtime OHA leader Bruce Goldberg became acting Cover Oregon director earlier this month after King went on medical leave. Goldberg has taken over daily oversight of the troubled exchange project.

Officials in Gov. John Kitzhaber’s office declined comment on Lawson’s departure. The governor has called for an independent review of the exchange technology development effort and how it went wrong.

The state is negotiating with a contractor it wants to conduct the review. “We’re still determining the scope,” said Kitzhaber spokesman Ian Greenfield. “We’re moving as fast as we can on getting this started.

So let’s get this straight: this state employee, who is not even an Oregon resident and apparently has business ties to the software contractor involved, completely blows the management of the Cover Oregon website and over $160 million in taxpayer dollars and you want to “thank her for her service”?

Running out of people to thanks and congratulate, the state then did the only logical thing: it decided to spend yet more money in order to enroll people using horribly-unfashionable-but-utterly-reliable paper application forms. The state spent $4 million to hire 400 new employees to process paper forms. They’re paid between $14 and $17 per hour, but ironically don’t get health benefits.

Oregon’s troubled health insurance exchange began robocalling applicants Friday, warning them that if they don’t receive enrollment confirmation by Monday, they should seek coverage elsewhere for Jan. 1.

“If you haven’t heard from us by Dec. 23, it is unlikely your application will be processed for Jan. 1 insurance coverage,” a woman’s voice on the pre-recorded call from Cover Oregon says. “If you want to be sure you have insurance coverage starting Jan. 1, you have other options.”

It’s yet another sign that the health insurance exchange’s technological breakdowns will prevent some — perhaps many — Oregonians from getting subsidized coverage Jan. 1, despite Gov. John Kitzhaber’s previous assurances otherwise. Out of more than 65,000 applicants, the exchange reports enrolling nearly 30,000, but only about 11,000 of them in private insurance plans.

The calls also suggest the exchange’s problems will prevent many of those individuals from receiving tax credits or subsidies in January, even though they qualify for them.

Cover Oregon spokesman Michael Cox said Friday he did not know how many recorded calls were being made. They targeted individuals whose eligibility for tax credits has not been determined, Cox said, including those with incorrect applications.

So the Cover Oregon spokesperson doesn’t even know how many calls it’s making to potentially affected individuals? Does anyone there know anything?

In response, the state extended the sign-up deadline by one week more than the extensions allowed by the Obama administration. Then, with one hour left in that deadline, extended the application deadline yet again to January 6th, 2014, with coverage retroactive to January 1st. Presumably the state’s insurers will be left covering the cost of benefits (but no premiums) received in the interim.

And oh yes, one more thing. After spending $8 million on ads to get people to sign up for Cover Oregon insurance even though the state had literally no way to process their applications in a timely fashion, the state finally decided to temporarily “suspend” those twee Cover Oregon ads on the day after Christmas.

But here’s the real point. After all of this spending – over $2,600 for each and every Cover Oregon applicant – not one single government employee has been held responsible in any way. No one has been fired. No one has been disciplined. In fact, no one appears to have even discussed firing or disciplining anyone for blowing over fifty cents of tax dollars for every man, woman and child in the United States with almost nothing whatsoever to show for it. When it comes to the government and what it does to the American healthcare system, results and costs don’t matter. There is no accountability, nor is any offered by those in power. In Boston on October 31st, President Obama took “full responsibility” for the defective rollout of the federally operated ObamaCare exchange website. But not a single head has rolled over that debacle either. In fact, as far as we know no one even received a gentle reprimand. If so it certainly never made it into the mass media.

“The Health and Human Services (HHS) Department on Friday claimed that HHS Secretary Kathleen Sebelius meets frequently with President Barack Obama and just had a meeting with him on Thursday, one day after a report by the nonpartisan Government Accountability Institute revealed that Obama and Sebelius have not had a one-on-one meeting since Obamacare passed.

That was the only specific date that either HHS or the White House mentioned while claiming Sebelius and Obama “regularly” meet.

The Health and Human Services Department released a statement indicating that Sebelius “has been to the White House countless times since becoming Secretary.”

“She is frequently at the White House for meetings related to the implementation of the Affordable Care Act, including dozens with the President in the last year alone. In fact, she met with the President just yesterday,” an HHS spokesperson said.

On Friday, White House Press Secretary also claimed that Obama “regularly” meets with Sebelius and that cabinet secretaries do not get frequently entered into the visitors logs.

As Breitbart News Senior Editor-at-Large and Government Accountability Institute President Peter Schweizer noted on Fox News’s Hannity on Wednesday, though, GAI examined the White House visitor logs and found that whenever Sebelius went to the White House, it was for social functions with “dozens or hundreds of people.” He noted on Hannity that if Obama met with Sebelius and left the meetings off the books, Sebelius would be the only cabinet secretary whose meetings with the White House were concealed.

The Government Accountability Institute report found that since Obamacare was signed on March 23, 2010, Obama met with “various Cabinet secretaries a total of 277 times,” but his presidential schedule did not “document a single one-on-one meeting” with Sebelius. There was, though, “one instance of Secretary Sebelius meeting jointly with the President and Secretary of the Treasury Timothy Geithner.”

In response, Time magazine’s Swampland claimed that Sebelius met with Obama “a lot” in undocumented meetings, while simultaneously reporting that the HHS Secretary admitted that “the President was never told the launch of HealthCare.gov was destined to flop”. Which brings us back to exactly the same question of exactly who the heck have we got running healthcare in this country? If they met so frequently, did the President really never, ever, bother to ask her, “Hey Kathleen, so how is this ObamaCare thing coming along?” Who on Earth is that incurious? Or are we supposed to believe that he cared enough to ask her, but she either lied to him or refused to tell him? If so, shouldn’t she have been the first one fired as the President vowed to accept full “responsibility”?

Here’s the point. What exactly does it mean to have our elected and appointed leaders “responsible”, but clearly not in any way accountable? Governing the regulation and delivery of healthcare is hardly some trivial or abstract thing; we’re talking about people’s lives here. Screwing it up on a routine basis inevitably means that some of us – perhaps even you or beloved members of your family – will literally die as a result of this level of incompetence. Yet the profound lack of accountability means that NOTHING will change for those in charge when it happens.

What a difference a year makes. Hellth in America is now closer than ever. If anything, the pace of our slide into the abyss will accelerate with the expanding reach of ObamaCare in 2014.

One very frustrating thing about living in 21st century America is that is seems perfectly acceptable for reporters and politicians to say or print just about anything, and immediately have it unquestioningly accepted by the vast majority of the voting public. Critical thinking, honesty and the quality of reporting seem to hit new lows each and every week. Perhaps this would not be so irritating if the fate of everyone’s standard of living, healthcare and personal happiness did not hang in the balance, but as often as not those are exactly the stakes involved.

One example that caught our attention recently was a Ron Nixon piece in The New York Times entitled “House Plan on Food Stamps Would Cut 5 Million From Program” – an article that begins with an attention-getting opening line that immediately alludes to the sort of cruelty usually associated with Josef Stalin or the Great Leap Forward of Mao Zedong:

WASHINGTON — Nearly half a million people who receive food stamps but still do not get enough to eat would lose their eligibility for the program under proposed cuts that are expected to be taken up again by Congress. An additional 160,000 to 305,000 recipients who do get enough to eat would also lose their eligibility and the ability to adequately feed themselves.

In total, about 5.1 million people would be eliminated from the program, according to a new report.

Starvation in America. Given our status as one of the most obese nations on the planet, this indeed a cruel irony. But while the average reader might be excused for conjuring up mental images of emaciated children and lean Dust Bowl Okies, we soon learn that reducing the number of food stamp recipients from 47 million to 42 million will be a healthcare disaster for entirely different reasons. Namely, reducing the amount of food consumed by poor Americans is going to increase the incidence of diabetes, obesity, hypertension and heart disease.

“What?” you’re probably asking, “Having Americans consume fewer calories is going to lead to more diabetes and obesity? I thought that our current plague of diabetes and obesity was caused by eating too much rather than eating too little.” Well there’s your problem. You’re thinking too much rather than relying on journalists and experts.

The Health Impact Project, a Washington research group, released a study on Tuesday about the impact of the proposed cuts to the food stamp program. The project is a collaboration between the Robert Wood Johnson Foundation and the Pew Charitable Trusts.

The report said the cuts to the program, also known as the Supplemental Nutrition Assistance Program, or SNAP, would not only affect the ability of low-income households to feed themselves but would also increase poverty.

The combination of poverty and a lack of food would lead to increases in illnesses like heart disease, diabetes and high blood pressure among adults, the study found. In children, the cuts would lead to higher rates of asthma and depression. Diabetes alone could increase federal and state health care costs by nearly $15 billion over the next 10 years, the report found.

“The SNAP program has implications for health, and we wanted to make sure that health is part of the debate,” said Dr. Aaron Wernham, the director of the project. “There is a large body of public health research which shows how food insecurity affects health.”

Since common sense and experts can’t both be right and the total cost of the SNAP program is set to exceed $80 billion in 2013, the journalist in us feels compelled to look a little further into this particular story in an attempt to ferret out the truth. On what basis does this apparently influential report suppose that a lack of food stamps (and presumably therefore food), actually cause diabetes, obesity, heart disease and so on – such that simply trimming the program will increase their incidence?

It seems that the study underlying the assertion that giving poor people fewer calories causes diabetes and obesity can be found here. Three academic researchers, one from the University of California, Davis, one from Northwestern University and the third from Columbia University looked at the relationship between the time food stamps were implemented in specific counties throughout the U.S. and the subsequent incidence of diabetes, obesity, high blood pressure, obesity, heart attacks and “metabolic syndrome” (the combination of obesity, high blood pressure and diabetes) in two population samples selected in 1968. The first was a representative sample of approximately 3,000 households and their descendants. The second was a sample of 1,900 low-income and minority “high risk” households. The question the investigators wanted to answer was: “Was there a relationship between the introduction of food stamps into a household’s county of residence, and the subsequent incidence of these illnesses in the households in question? If so, is the change specifically linked to having food stamps available during pregnancy and early childhood?”

That these investigators were looking for such a relationship was hardly random. They cite previous studies showing that serious problems encountered in utero and in early childhood can affect long term income, health status, wages and educational achievement. Examples include famine, and exposures to diseases and radiation. One theory that has evolved as a result of these observations is that perhaps an infant’s body is “programmed” for long-term survival based upon the conditions that it sees in utero and in the first few years thereafter.

During development, the fetus (and post-natally the child) may take cues from the current environment to predict the type of environment it is expected to face in the long run and in some cases adapts its formation to better thrive in the expected environment. A problem arises, however, when the predicted later environment and the actual later environment are substantially different. For example, if nutrients are scarce during the pre- (or early post-natal) period, the developing body therefore predicts that the future will also be nutritionally deprived. The body may then invoke (difficult-to-reverse) biological mechanisms to adapt to the predicted future environment. For example, the metabolic system may adapt in a manner that will allow the individual to survive in an environment with chronic food shortages. This pattern is termed the “thrifty phenotype” and is sometimes referred to as the Barker hypothesis. The “problem” arises if in fact there is not a long-run food shortage, and nutrition is plentiful. In that case, the early-life metabolic adaptations are a bad match to the actual environment and will increase the likelihood that the individual develops a “metabolic disorder,” which is the clustered association between high blood pressure (hypertension), type II diabetes, obesity and cardiovascular disease.

Since food stamps were rolled out on a county by county basis throughout the U.S. between 1962 and 1975, the investigators wanted to see if there was empirical evidence that new and ongoing access to food stamps at different stages of infant development would influence the development of obesity and related diseases in later life. To accomplish this they did a regression analysis, which is a statistical method that attempts to describe the degree with which measured outcomes can be ascribed to a particular variable. In this case, the variable in question is whether individuals had access to food stamps between conception and the age of five (“FS share IU-5”).

Well? What did they find?

The main results we’re interested in for the “High Impact” (i.e., poor) population are shown in Table 2 shown below. (*** indicates that a result is significant to p=0.01, * indicates p=0.10. The outcome coefficient in the first row (e.g., -0.294***) means that this fraction of the variation in the outcome can be explained by the presence or absence of food stamps in early childhood.)

As you can see, there was a highly significant correlation between the early availability of food stamps in poor and minority population and the later onset of metabolic syndrome. Altogether, the presence or absence of access to food stamps explained about one-third of the elevated risk of metabolic syndrome in this population. There was also a slightly, but statistically questionable reduction in obesity generated by early access to food stamps. However there was no significant correlation between early food stamp access and diabetes, high blood pressure, heart disease or heart attack as independent outcomes (i.e., not associated with metabolic syndrome). So there may be something to the “early life programming” theory with respect to metabolic syndrome and maybe even with relation to obesity, but not with respect to the long-term risk of diabetes, high blood pressure or heart disease.

How many people in the “High Impact” sample actually developed metabolic syndrome? Apparently about 1%. That’s just one-fifth of the people who developed diabetes, and less than one-thirtieth of those who became obese. So overall, we don’t seem to be talking about a major impact on the population most at risk.

But there are other problems with taking these results and blithely asserting that a 10% reduction in food stamp beneficiaries will increase healthcare costs due to this particular biological mechanism. For one thing, in order for the programmed developmental changes associated with metabolic syndrome to occur, pregnant women, infants and small children have to be exposed to nutritional deficits over a very specific period of biological development – early childhood. Depriving teenagers, adults and the elderly of food stamps can be expected to have little or no impact.

Interestingly enough there just happens to be a federal food program for that, and it’s not SNAP. It’s called the Women, Infants and Children Program, or “WIC”. WIC is a USDA food program was rolled out in 1972 and made permanent in 1974 – right at the end of the nationwide rollout of food stamps. WIC is available in all 50 States, 34 Indian Tribal Organizations, American Samoa, District of Columbia, Guam, Commonwealth of the Northern Mariana Islands, Puerto Rico, and the Virgin Islands. Ninety WIC State agencies administer the program through approximately 1,836 local agencies and 9,000 clinic sites. And who does WIC happen to serve? Low-income pregnant and breastfeeding women, as well as children through the age of five. That just happens to be the same group – and the only group – for whom food stamps have been shown to be of benefit for preventing metabolic syndrome and obesity.

Lest we worry that WIC is some pint-sized program that doesn’t have much demographic reach:

During Fiscal Year (FY) 2011, the number of women, infants, and children receiving WIC benefits each month averaged almost 9 million participants per month. In 1974, the first year WIC was permanently authorized, 88,000 people participated. By 1980, participation was at 1.9 million; by 1990, 4.5 million; by 2000, 7.2 million; and by 2010, 9.2 million. Children have always been the largest category of WIC participants. Of the 8.9 million people who received WIC benefits each month in FY 2011, approximately 4.7 million were children, 2.1 million were infants, and 2.1 million were women.

It seems fair to say that, after the development of the food stamp program, the federal government doubled down by launching a new additional program specifically targeted toward those who would be most at risk for developing metabolic syndrome. This raises the question of whether the extra food assistance contributed by SNAP is medically necessary if your goal really is to prevent obesity, diabetes, high blood pressure and heart disease? Is more food assistance always better?

This is an increasingly important question in light of some convincing recent research that suggests that food stamps themselves are contributing to obesity.

This work comes from Jay Zagorsky at Ohio State University and the Patricia Smith at University of Michigan, Dearborn. Published in 2009, Zagorsky and Smith’s work took a comprehensive look at the differences between populations that were identically matched for income, county of residence, education and a host of other factors, but differed with respect to whether they participated in the food stamp program:

In this study, Zagorsky and Smith compared nearly 4,000 survey participants who used food stamps with almost 6,000 survey participants who did not. They looked at BMI and food stamp use among the participants from 1989 to 2002…

Obesity has been linked to poverty, so the researchers took into account income and a variety of other factors – including race and education — that may have also affected the weight of survey participants, outside of the use of food stamps.

In addition, the study compared people who lived in the same counties, to take into account that there may be local factors that affect obesity rates.

Even after the various controls, the link between food stamp use and higher weight remained clear, especially for women.

While female food stamp users in general had an average BMI that was 1.24 points higher than those not in the program, white women’s BMI was 1.96 points higher, while black women’s BMI was 1.1 points higher.

Male food stamp users, both white and black, did not have significantly higher BMIs than those not in the program.

Additional evidence of food stamps’ role in weight gain came when the researchers looked at how people’s BMI changed before, during and after they were on food stamps.

Results showed BMI increased over all three periods, but increased the most when participants were on food stamps.

The average food stamp users saw their BMI go up 0.4 points per year when they were in the program, compared to 0.07 points per year before and 0.2 points per year after they no longer received the benefits.

In addition, the study found the longer participants received food stamps, the higher their BMI.

“Every way we looked at the data, it was clear that the use of food stamps was associated with weight gain,” Zagorsky said.

One very interesting result from this study is that the use of income, education and location-matched controls suggests that food stamps themselves are an actual cause of the problem. One argument that frequently arises is that poor people have to buy high-fat, high-calorie food because those are the foods that are cheap, and/or they don’t know which foods are healthy. But if that’s the case, why is it that equally poor and uneducated people (but who are clearly not starving, judging by their own average BMI) are actually thinner? The obvious answer is that SNAP benefits are themselves an unhealthy source of extra calories.

Other economics research certainly seems to support this interpretation. We would point our readers to an interesting 2010 paper by Charles L. Baum II at Middle Tennessee State University:

The Food Stamp Program potentially increases obesity by increasing food consumption, resulting in excessive caloric intake. Food stamps potentially increase food consumption by making the monetary cost of food zero for eligible individuals up to their food stamp allotment (though since Food Stamp Program participation rates are well below 100 %, non-monetary costs such as stigma

and the opportunity cost of applying and re-certifying for the benefits likely remain significant). A survey of the literature suggests a dollar of food stamps increases food consumption between $0.17and $0.47, which is more than an equivalent amount of cash would (Fraker1990). It is not surprising that this would be true for constrained households, but this also appears to be true for the other 85 to 95 % of food stamp households that are unconstrained (Fraker1990).

Although recipients could potentially use food stamps to buy healthier foods, recent evidence by Wilde, McNamara, and Ranney (1999) suggests food stamp recipients consume significantly more sugar and fat than eligible non-recipients. Additional evidence by Whitmore (2002) indicates that food stamp recipients in San Diego and Alabama in the 1990s consumed more soft drinks than peers who instead received cash benefits. If so, then it is possible that recipients not only consume more food, they consume more of the foods likely to lead to weight gain.

Baum’s own research goes on to conclude that food stamps do contribute to obesity, but their total impact is small relative to the overall U.S. obesity epidemic. This shouldn’t be surprising since most Americans are overweight, but “only” 47 million currently participate in SNAP. What should be surprising, however, is that well-funded and prestigious organizations like the Robert Wood Johnson Foundation and the Pew Charitable Trust apparently missed all of this research in their recent report. It seems that there are a good reasons that witnesses asked to testify in court are exhorted to “tell the truth, the whole truth, and nothing but the truth.” If only we had the same standard when it comes to media and healthcare reporting.

Based upon everything we’ve seen so far, at least three key observations can be made about health, disease and food stamps.

First, we should all be very skeptical about health claims made on behalf of specific political actions. Consider some recent examples. The huge federal subsidies and penalties legislated for the use or non-use of electronic medical records were justified on the basis of financial and medical benefit claims which were inflated at best, and even fraudulent. The Affordable Care Act was supposed to save money and make healthcare more efficient – something that seems laughable in retrospect. Now cutting food stamp programs will cause obesity, diabetes and (directly or indirectly) death. The common denominator in all of these claims is the use of healthcare and medicine to justify what are essentially political (and often lobbyist) agendas.

Second, with respect to the specific issue of food stamps raised by the Nixon New York Times article, it seems safe to say that the WIC program has removed much or all of the potential risk of metabolic syndrome and obesity occurring as a direct result of pregnancy and childhood-related caloric deficiency in the U.S.

Finally, from a medical and health perspective the SNAP program is broken. Part of the problem is that SNAP benefits can be used for a host of high-calorie, high-fat foods that directly contribute to obesity and health complications in the poor. SNAP benefits now pay directly or indirectly for fast food, cookies, birthday cakes, soft drinks, “energy drinks”, Twinkies, Ho-Hos, Ding Dongs, candy bars, Cheez-Its and a host of other junk foods that would prove excellent fodder for fattening hogs. In fact, food stamps are used to purchase about $2 billion worth of sugary drinks each year, even as the rest of state, federal and local governments are spending billions to discourage their use. Lowering the cost of these foods to essentially zero is a disservice to anyone, let alone those who might struggle to keep their weight down under the best of circumstances. Is the food stamp program trying to help these people, or kill them with kindness?

It appears that substantial portions of the Road to Hellth are paved with food stamps.

One of the major cost-saving initiatives behind ObamaCare is the consolidation of hospitals and doctors into “Accountable Care Organizations”, or ACOs. It is presumed that forcing these organizations to utilize the same doctors, hospitals, clinics, EMRs, labs, imaging centers and so on will create more efficient, seamless and less costly care. (This was not really borne out by Medicare’s own ACO pilot program, but that’s ObamaCare’s story and it’s sticking to it.)

Unfortunately, one of the first casualties of ACO mania is that solemn promise that ObamaCare wouldn’t force you to change either your current doctor or you health insurance. Sad to say, if the experience of pro-ObamaCare Oregon is any guide, the trusting among us have been suckered by their elected officials yet again.

Oregon is a major test case for ObamaCare due to the enthusiastic embrace of the ACA law by state government. Both houses of the legislature and the governorship are held by Democrats, and the governor has pushed for a state version of the ACO concept called “Coordinated Care Organizations” (CCOs) to care for the state’s Medicaid population.

The state’s healthcare systems have responded accordingly. Perhaps foremost of these is the Sisters of Providence Health System, which owns a health insurance company as well as a network of labs, imaging centers, outpatient clinics, hospitals and physicians all the way from Alaska to California. In a bid to bulk up its ACO/CCO credentials, Providence has enagaged in a buying spree that has slurped up physicians and medical practices like so many protein shakes. In addition to primary care practices, Providence has been buying up specialists and sub-specialists. It recently convinced a large cardiology group from The Oregon Clinic to become employees after hinting that independent cardiologists might no longer qualify for hospital privileges in the new CCO environment.

With all of this consolidation it came as quite a shock to many in the Portland-area residents when Providence announced that, as of 2013, patients who were perfectly happy with their HealthNet insurance policies would no longer be allowed to use their lifelong Providence doctors, hospitals or other resources. No reason was given, although it seems clear that Providence was unhappy with the prospect of allowing HealthNet patients to choose to use Providence doctors and hospitals for some aspects of their care, and non-Providence facilities for others. This is exactly in line with ACO philosophy and practice.

‘Chris Ellertson, president of Health Net of Oregon, admitted he was blindsided by Providence’s decision in email correspondence obtained by The Lund Report. “We’ve historically had a good working relationship with them,” he wrote. “And, we talked some time ago about how we could further support the work they are doing within their medical group. It’s the same sort of problem-solving that we’ve been focused on in our work with a number of providers. Then, seemingly out of blue, a termination notice. No phone call. No indication. Astonishing.”’

Providence Health insurance plan CEO Jack Friedman denied that there wan any anti-competitive hanky-panky involved in the decision, saying: “This was a mistake; I had no role in this, no voice,” Friedman told The Lund Report. “There is a huge wall between the health plan and the health system when it comes to payer contracting. The health plan has no voice in a decision on the delivery system nor should it have a voice.”

Regardless, the net affect of the Providence decision is to force HealthNet patients to either change their health insurance, or change the doctors, hospitals and other facilities they may have used for generations. Many people who literally live right next to Providence hospitals and clinics are now being forced to drive for miles to a different doctor and facility that they are allowed to use. Gone are the days when a patient might be allowed to pick and choose among doctors and hospitals based upon which one has the most skill and the best equipment rather than whether or not they happen to belong to the owner of a competing insurance company.

Another disturbing aspect of the decision is that it makes it clear that institutions like Providence are explicitly being given monopoly power under ObamaCare to control not only health insurance in a given market, but the doctors, hospitals, clinics, labs and imaging centers as well. This clearly has the potential to result in situations in which the amount and types of care provided are chosen to maximize overall profits to the Providence system rather than medical benefits to patients.

It seems clear that President Obama and the Democrats in Congress who passed this law either did not know what was in it, or deliberately lied about its implications for consumer choice in healthcare. Or perhaps they had to pass it so that they could find out what was in it?

Whether the American voters realized it or not, arguably the single most important result of the 2012 Presidential election had to do with the future of what President himself has now termed “ObamaCare”. Apparently admitting that resistance to ObamaCare is as futile as assimilation into The Borg, House Speaker John Boehner announced that “ObamaCare is the law of the land” and that House Republicans would cease offering bill after bill trying to repeal it.

A great deal has already been written about ObamaCare and its many moral, medical and economic hazards. Americans for Tax Reform has a web page listing over 20 new taxes that will be levied as a result this law, many of them hitting all Americans directly and/or indirectly rather than just the middle-class. (This list does not include the implicit tax levied on all Americans by forcing them to buy health insurance policies that include a hefty assortment of mandatory coverage items that they will be unlikely to ever use.) There are even whole books that have been written on “Why ObamaCare is Wrong for America”, “The Truth About ObamaCare”, and “The ObamaCare Disaster”.)

Yet it doesn’t seem as if any of this information made any difference to the outcome of the recent Presidential election. Why? Because, let’s face it: the vast majority of people don’t read much, (or at all). And they certainly are not about to waste valuable television, Wii and texting time learning about something as boring as what the President and a willing Congress have done to the future of American healthcare.

One of the great travesties and tragedies of the 2012 election season was the complete lack of any serious discussion of the philosophy, nature and underlying structure of ObamaCare. Voters were treated to the usual talking points about how this massive law “insurers millions of Americans” on one hand, and “cuts $716 billion from Medicare” on the other hand. Yet the vast majority of voters don’t know anything more about what’s in Nancy Pelosi and Harry Reid’s bill now than they did at this time last year or the year before. The media certainly hasn’t helped to educate them. Hard questions appear to be beyond the capability of the average 21st century reporter, while actual journalistic research and investigation is something that we can only read about in history books. Heck, media “fact checkers” can’t even seem to distinguish between actual facts and their own interpretation of what a given candidate was trying to say.

Now that it looks as if ObamaCare may be the law of the land for the foreseeable future, it’s even more important that Americans really, truly understand it. The reason should be obvious: this law is going to influence virtually everything that happens when our loved ones get sick or interact with the healthcare system from now on. Things don’t get much more serious or profound than that. That is why every American, regardless of their politics, should read or listen to Dr. Richard Fogoros’ new book, Open Wide and Say ‘Moo!’: The Good Citizen’s Guide to Right Thoughts and Right Actions under Obamacare. We’re serious. Every single American.

Moo! Is a remarkable book on several levels. For one thing, Dr. Rich (as Dr. Fogoros is known from his Covert Rationing Blog) wrote it at a rate of one chapter per week, posting each completed draft on his website for comments from readers. For another, the book is actually easy and interesting to read – at least for the first 12 chapters or so. This alone is unusual for a book dealing with the normally headache-inducing world of healthcare policy.

But most importantly, Moo! is remarkable because it does what no other work has bothered to do throughout the whole multi-year history of ObamaCare: it explains why the mysterious, anonymous people who wrote the Affordable Care Act (ACA) legislation designed the law in the way that they did.

The average person who looks at the actual ACA law is unlikely to be able to decipher much of anything that it says. The average person who knows something about the structure and function of healthcare delivery might (with great effort) be able to understand much of the actual text, but will be perplexed by the apparent illogic of the measures mandated by the law. How can it possibly make sense to mandate that 46 million more Americans have insurance, much of it provided through Medicaid plans that do not even pay the actual cost of the care provided, but make no provision for increasing the number of doctors available? How can Congress mandate that the Independent Payment Advisory Board reduce Medicare costs by $716 billion, but simultaneously insist that Medicare benefits shall not be reduced? And if our insatiable demand for healthcare goods and services has created situation in which the country is being bankrupted, why does ObamaCare increase the number and types of mandated insurance benefits instead of reducing them? On the face of it, it makes no sense.

In Moo!, Dr. Rich manages to illustrate not only the structure but the function of ObamaCare, by explaining the philosophy and intent of the Progressives who wrote it. In some parts, the book actually reads like a detective story as Fogoros goes all the way back to the 1990s HillaryCare legislation to unearth the roots of specific passages and provisions. As Moo! explains, the folks who created ObamaCare have a world view that has been well-defined and consistent for decades. Their perspective is one in which what’s “best” for society trumps whatever might be best for individuals. In addition those with “progressive” views are the people best qualified to decide what is “good” and “bad” from a societal perspective. In other words, those crafting this law truly believe that they can do a better job running the healthcare system than anyone else, and that the passage of ObamaCare has given them the opportunity to remake the American healthcare system as they see fit. The system that they prefer – and that ObamaCare inexorably implements – is one in which decisions about how, where, when and under what circumstances healthcare goods and services will be delivered are centralized. Once made in the minds of government regulators, they will ultimately be shared with the rest of us in a top-down fashion.

“But hang on there, Cowboy!”, many will say. “This sounds like one of those right-wing nut job conspiracy theories about a ‘government takeover’ of medicine! Why should we be expected to read that sort of drivel?”

One great thing about the way Moo! is written is that Dr. Rich simply suggest a hypothesis that appears to fit the facts, and then presents the indisputable real-life attributes of the ObamaCare legislation. We are then allowed to draw our own conclusions about whether these facts actually fit the theory. And while the author openly invites us to come up with an alternative hypothesis for why the law forces providers and patients to do this or that, for us it is darned difficult to come up with an different explanation that makes nearly as much sense. But don’t take our word for it; read it for yourself. We’ve love to hear if you can do better.

The latter portion of Moo! deals with the author’s recommendations about what patients and providers can do to protect themselves and their families against the very real hazards presented by the top-down “socially optimized” administration of healthcare that we’ll be dealing with from now on. (Or at least until this legal and social mess is repealed by a more enlightened, economically and medically realistic Congress.) This is where Fogoros’ story becomes tougher follow, although probably through no fault of his own. For one thing it is easy to become so depressed by understanding exactly what the average patient and clinician are in for, that the solutions proposed seem inadequate to cope the mess. Indeed, it’s not hard to conclude that the only real solution is to get rid of the damned law entirely rather than try to escape its insidious affects as individual – almost fugitive – doctors and patients.

Regardless, we believe that Open Wide and Say Moo! is one of the most original, interesting and most provocative works on the subject of healthcare in general, and ObamaCare in particular, that has come along in many years. It should be mandatory reading for everyone, but particularly anyone who is involved in healthcare, training for any position that will deal with healthcare, and especially every legislator and government official in the world. Perhaps if they see how impossible it will be to produce a satisfactory result with a top-down approach, they will summon the courage (and the cojones) to find a better way.

A few weeks ago (how time flies!), we set out to explore the various elements and implications of the newest addition to the state laws governing the delivery of healthcare in Massachusetts: “An Act improving the quality of health care and reducing costs through increased transparency, efficiency and innovation”, and officially identified by the rather more prosaic name of “Chapter 224 of the Acts of 2012”.

We had gone to some lengths to condense the most notable of these 349 pages of new rules and regulations into a PDF document just 39 pages long. Combined with the Massachusetts healthcare laws originally passed under Governor Mitt Romney, and then substantially modified by the Democratic Party-controlled state legislature and Romney’s Democratic successor Gov. Deval Patrick, these laws essentially allow the state government to dictate just about anything and everything about the way healthcare is provided in that fair Commonwealth. Because of this, we have dubbed them “The Mass Mandates”.

Now one might think that the prolonged interval since our last post would have been more enough time for our distinguished readers to review the entire content of Chapter 224, or at least our 39-page condensate. However we’re willing to bet that few, if any, of you did so. After all, most of you have real lives. So in this post we’ll look at some of the specific provision and their implications. Doing so is important because under the second Obama Administration, the “ObamaCare” Affordable Care Act is quite likely to continue to ape the approach taken in Massachusetts. Why? Because the Democratic Party-controlled Massachusetts legislature, Governor Patrick and the Obama Administration share a common perspective with respect to what ails the U.S. healthcare system and how to fix it. (For the definitive work describing this perspective and its implications, we highly recommend the new book by Dr. Richard Fogoros, Open Wide and Say Moo! More on that in an upcoming post…)

So let’s go ahead and see what Massachusetts is mandating now.

The first thing that one notices about the new Mass Mandates is its naked honesty: the government of the Bay State is well on the way to taking complete control of its healthcare system. No more pussyfooting around. No more qualms about “creeping socialism” (or even “leaping socialism” for that matter). No more apologies or half-measures. Private enterprise may technically own the resources used to deliver healthcare services, but government entities will increasingly dictate whether, when, where and how they are to be deployed.

The quite visible hand of Massachusetts state government has been authorized to stick its fingers into just about every aspect of medicine, apparently regardless of who is asking – and paying for – the goods and services rendered. The ways in which it goes about doing this amount to a veritable laundry list of new rules, regulations and regulatory bodies. That’s one reason the text of the bill that was passed into runs to 349 pages.

Let’s go through a number of them individually.

The Health Planning Council

This very-high-level group is located within the state executive office of health and human services. It consists of:

The state secretary of health and human services (or designee) who is the chairperson

The commissioner of public health (or designee)

The director of the office of Medicaid (or designee)

The commissioner of mental health (or designee)

The secretary of elder affairs (or designee)

The executive director of the center for health information and analysis (or designee)

The executive director of the health policy commission (or designee), and

3 members appointed by the governor: a health economist, a health policy planner, and a health care market planner/service line analyst

The very first thing the Health Planning Council will do is to form an advisory committee that is supposed to “reflect a broad distribution of diverse perspectives on the health care system.” The second is to create a comprehensive “state health plan” that is intended to keep track of, well, everything:

The state health plan developed by the council shall include the location, distribution and nature of all health care resources in the commonwealth and shall establish and maintain on a current basis an inventory of all such resources together with all other reasonably pertinent information concerning such resources. For purposes of this section, a health care resource shall include any resource, whether personal or institutional in nature and whether owned or operated by any person, the commonwealth or political subdivision thereof, the principal purpose of which is to provide, or facilitate the provision of, services for the prevention, detection, diagnosis or treatment of those physical and mental conditions experienced by humans which usually are the result of, or result in, disease, injury, deformity or pain…

(d) The department may require health care resources to provide information for the purposes of this section and may prescribe by regulation uniform reporting requirements. In prescribing such regulations the department shall strive to make any reports required under this section of mutual benefit to those providing, as well as, those using such information and shall avoid placing any burdens on such providers which are not reasonably necessary to accomplish this section. Agencies of the commonwealth which collect cost or other data concerning health care resources shall cooperate with the department in coordinating such data with information collected under this section.

That’s right. From the lowliest medical assistant to the most sophisticated gamma knife, the Health Planning Council wants to know about anything and everything that has anything to do with the provision of healthcare within the state. Think about that for a minute; about how massive and intrusive and expensive and permanent just this one first provision of the Mass Mandates law happens to be. Every single hospital, clinic, nursing home, imaging center, (and maybe even 24 hour fitness center depending upon how the Health Planning Council wants to define its regulations) will need to report whatever the Council decides it needs to report. How detailed do these reports have to be? It’s completely up to the discretion of the Council. How many square feet is your facility? What pieces of equipment does it have, including make, model and year of manufacture? How many people do you employ, and what are their names and job titles? What is their training? Are they certified, and if so in what and by whom? How many computers do you have? What software are you using for EMR, CPOE, lab orders and billing? Anyone who has ever had to deal with the Internal Revenue Service, the EPA, OSHA or federal securities laws will recognize the sinking feeling that accompanies these sorts of requests for information. Whether it’s really “important” or “necessary” is a matter of opinion; in this case the opinion of members of the state Health Council.

Of course the Health Council’s database will be useless unless it’s maintained and up-to-date, which means that all of this information will need to be updated and re-submitted every year. Otherwise it wouldn’t be of any practical use. One immediate result is going to be a substantial increase in the administrative overhead faced by very healthcare facility in the state, along with a corresponding increase in their cost of doing business. This new cost will be incurred without delivering one iota of actual healthcare goods or services to anyone, anywhere in the state. By definition, the Council’s first act will be to lower the productivity of the healthcare system in Massachusetts. (Productivity is defined as the number of units of input (e.g., dollars), required to produce a unit of output (e.g., number of patients cared for).

Why would they want to do this?

The rationale offered by the law is that all of this information will assist the Council in “making determinations of need”. When it comes to healthcare, determining need is not just about what community needs a new clinic or a new MRI machine, but it’s also a tool that allows regulators to block the introduction of new medical resources into any community where they do not wish them to go. The reasoning is that the availability of facilities will cause them to be used, thus increasing the total cost of healthcare.

But lots of states and municipalities make determinations of need just fine every day without demanding this level of detailed reporting from every healthcare establishment in the state, much less doing so in perpetuity.

The only rational explanation for establishing this database is if the Health Council (or its surrogates) intends to insert itself more forcefully into the operational details of delivering medical care. While some readers might think that we’re being alarmist by simply mentioning the possibility of direct government control of – or at least interference in – the makeup and operation of even private medical facilities, the rest of the law seems to support the idea. Indeed, there seems to be no question that the government of Massachusetts is getting into the business of telling doctors and patients exactly what they’re expected to do, how, and when. Let’s let the law speak for itself.

The very next entity created by Mass Mandates 2 is the Health Policy Commission. This commission “shall be an independent public entity not subject to the supervision and control of any other executive office, department, commission, board, bureau, agency or political subdivision of the commonwealth.” In other words, it’s not answerable to anyone. The commission is governed by a board of eleven appointed people, including the secretary of health and human services, the secretary for administration and finance, and nine other health care policy and finance “experts” appointed by the governor, the attorney general and the state auditor. Only one doctor is allowed on the board: a primary care physician. (Medical specialists need not apply regardless of their qualifications.) An equal number of board members (i.e., one) shall be appointed to represent the interests of labor unions. Just to make sure that no one thinks that this commission can do pretty much anything it wants without having to answer to anyone, the law is explicit:

(d) Any action of the commission may take effect immediately and need not be published or posted unless otherwise provided by law.

The executive director may appoint other officers and employees of the commission necessary to the functioning of the commission.

The executive director shall not be required to obtain the approval of any other executive agency in connection with appointment of employees.

The money used to finance the commission and its activities is going to be coughed up by the very people and organizations that it intends to regulate:

Each acute hospital, ambulatory surgical center and surcharge payor shall pay to the commonwealth an amount for the estimated expenses of the commission.

One of the primary missions of the Health Policy Commission is to strictly regulate the cost of all healthcare goods and services provided by any organization providing a significant amount of healthcare goods and services to the public, regardless of who is paying for it. This is done by fining hospitals and clinics if the total dollar value of the goods and services that they provide increases faster than an arbitrary amount specified by the law – initially the rate of growth of state GDP, then less than the increase in GDP, followed by whatever limits might be set at the whim of the commission. Penalties for missing the targets will apply to groups and hospitals with more than $25 million in gross revenue; about a medium-sized group practice. The penalty? Initially it’s having to come up with a plan for coming into compliance, but if that doesn’t work (or the commission decides that it wasn’t good enough) providers can be fined a civil penalty of up to $500,000.

One interesting attribute of this regulation is that the government is imposing these regulations and penalties not based upon the cost of any particular item, nor based upon the inappropriate utilization of healthcare services, but based upon the change in cumulative total healthcare expenditures. There are many reasons why the total costs incurred by any particular healthcare institution or provider might rise at a rate greater than state GDP. The provider in question might, for example, experience increases in the cost of the medications or other supplies that it needs to treat patients. Or it might experience an increase in the number of older, sicker patients treated. Or it might even experience substantial cost overruns in government-mandated expenses such as electronic medical record systems or the administrative overhead needed to comply with new reporting requirements and try to raise prices to recoup the cost before going bankrupt. (Or even the new mandatory fees incurred to pay for the activities of the Health Policy Commission itself.) It really doesn’t matter. According to the law, the commission is obligated to crack down on sources of “excess” spending and bring them back into line with politically “acceptable” norms.

While it certainly sounds nice to say (as the law does) that the cost reductions will be managed by increasing “efficiency”, government management of healthcare almost universally works in the opposite direction. Since the same regulators imposing cost restriction have said that “quality” and “patient satisfaction” must not suffer at the hands of cost cutting, clinicians are presented with an impossible situation. How can you deliver friendly, “hands on” service if you’re required by law to be glued to a computer screen? How can one provide better clinical care if newer, more effective (but also more expensive) medications are denied a place in cost-conscious formularies? How is it sustainable for clinicians be held responsible for the total cost of care, when patients are under no obligation to take the medications or other treatments prescribed, or even take the most basic responsibility for their own care?

It is very, very difficult to see how these sorts hard-and-fast, yet mutually exclusive requirements can possibly be compatible with an effective and sustainable healthcare system. However they are perfectly in line with fostering an ineffective and unsustainable one.

We’ve only begun to scratch the surface of what’s required by the brave new world of Mass Mandates 2. There is LOTS more to come. The journey will continue in our next post on the topic.